Capitation payments shrinking

MANAGED CARE December 1999. ©1999 MediMedia USA

HMOs seem to be tightening capitation payments to physicians in an effort to bolster sagging profits, according to a recent survey of 466 provider groups by National Health Information. The survey also suggests that primary care doctors are becoming more adept at protecting themselves in the capitation game, buying stop-loss insurance at a much greater rate than specialists. However, the authors did note that physician organizations in multiyear contracts "may find themselves obligated to purchase stop-loss from the contracting HMO," a factor that may not be as compelling for specialists.

The survey's publisher says that physicians should not panic, pointing out that cap rates are very often adjusted according to the realities of local markets.

"While profitability in some markets has dropped to the lowest point in four years, providers who stay the course are likely to find a more navigable road in the year 2000 than the pothole-strewn path they've maneuvered during the past year."

SOURCE: NATIONAL HEALTH INFORMATION'S 1999 CAPITATION SURVEY. FOR INFORMATION, CALL 800-597-6300 OR VISIT WWW.NHIONLINE.NET